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Archive for August, 2010|Monthly archive page

Implementing a Trade Secret Protection Program

In Implementation of Security Program on August 31, 2010 at 10:59 am
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Metropolitan Corporate Counsel has an interview with Alan Gutterman regarding how to implement a trade secret protection program.  Gutterman recites some of the common elements to such a program:

[A]doption of security measures to mark trade secrets, thus, identifying what is or is not considered to be confidential. The programs also include segregation of trade secret information and limitation of access to the trade secret owner or other authorized personnel. I also recommend that a program places employees on notice that the company maintains confidentiality of its trade secret information and that each employee has a duty to assist in protecting such items. Read the rest of this entry »

Sixth District Holds That Reasonable Royalties Available When a Defendant Has Not Realized a Profit or Other Calculable Benefit

In California Appellate Opinions, Damages, Reasonable Royalty, Unjust enrichment on August 30, 2010 at 3:53 pm
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Today, in Ajaxo Inc. v. E*Trade Financial Corporation, — Cal.Rptr.3d —-, H033631, 2010 WL 3386479 (Cal. Ct. App. 6th Dist. Aug. 30, 2010), the Sixth District held that where a defendant has not realized a profit or other calculable benefit as a result of his or her misappropriation of a trade secret, unjust enrichment is not provable within the meaning of section 3426.3(b). Thus, the trial court had discretion pursuant to section 3426.3(b) to order payment of a reasonable royalty.

Plaintiff Ajaxo Inc. (Ajaxo), sued defendant E*Trade Financial Corporation (E*Trade) for misappropriation of trade secrets under the California Uniform Trade Secret Act.  E*Trade was found liable in a prior jury trial, where a jury determined that E*Trade had willfully and maliciously misappropriated Ajaxo’s trade secrets.  Id. *1.  A second trial determined the extent to which E*Trade had been unjustly enriched by its misappropriation.  Id. Read the rest of this entry »

America’s Most Secretive Companies

In Fun with Trade Secrets on August 30, 2010 at 7:40 am
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The key element of a trade secret is, of course secrecy.  As defined in the California Uniform Trade Secrets Act (“UTSA”), a trade secret is means “information, . . . that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Some companies are better than others in maintaining secrecy.  Last Friday, 24/7 Wall St. ranked the companies that, in its view, are America’s most secretive:

1. Apple, Inc.

2. Xe Services LLC (f/k/a Blackwater Worldwide)

3. Renaissance Technologies

4. Google Inc. Read the rest of this entry »

Northern District Holds No Cause of Action Exists for Misappropriation of “Ideas”

In Motion to Dismiss, Preliminary Injunction on August 28, 2010 at 6:30 am
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The Northern District held that no cause of action exists for “misappropriation of business ideas”.  Interserve, Inc. v. Fusion Garage PTE. Ltd., No. C 09-5812 RS (PVT), 2010 WL 3339520 (N.D. Cal. Aug. 24, 2010) (slip op.).

Plaintiff Interserve, Inc. and Fusion Garage collaborated in an attempt to bring to market a tablet computer, which they intended to call the “CrunchPad.”  Id. *1.  Shortly before the parties had planned to announce that the product would soon be released, defendant Fusion Garage advised plaintiffs that it would proceed on its own, and market a tablet computer under the name “joojoo” instead. Id. Plaintiffs brought suit, alleging that they are co-owners of the joojoo.  Id. They sought a preliminary injunction requiring defendant to sequester all proceeds it obtains from selling the product. Id. Defendant opposed the motion for preliminary injunction, and moved to dismiss the complaint, including a claim for misappropriation of “business ideas”. Id. Read the rest of this entry »

In Software Distribution Case, Northern District Holds That Improper Disclosure Element of UTSA Claim Properly Pled Where Acknowledgment of EULA Alleged

In Motion to Dismiss on August 27, 2010 at 5:29 pm
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In BMMSoft, Inc. v. White Oaks Technology, Inc., No. C-09-4562 MMC, 2010 WL 3340555 (N.D. Cal. Aug. 25, 2010), the court denied a motion to dismiss a misappropriation of trade secrets claim in an unauthorized software distribution case.  The court held that the improper disclosure element was properly pled where the complaint included an allegation that defendant clicked “I agree” to an end user license agreement restricting unauthorized disclosure. Read the rest of this entry »

Streamlined Jury Trials Bill Passes Legislature

In Breaking News on August 25, 2010 at 4:14 pm
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In a positive development for both plaintiffs and defendants, a bill establishing an expedited jury trial procedure has sailed through the California Legislature.  The Wall Street Journal Law Blog and The Recorder reported today that Assembly Bill No. 2284 was approved by the legislature on a unanimous vote.  The bill, entitled the Expedited Jury Trials Act, was introduced by Assembly Member Noreen Evans (D-Santa Rosa).  It calls for the establishment of strealined jury trials in civil cases, where the parties stipulate to them.  Some of the highlights:

  • Waiver of all rights to appeal, motions for directed verdict, and post-trial motions;
  • Only 3 hours per side to present its case;
  • Jury sizes of 8 or fewer, with no alternates, and only 3 peremptory challenges;
  • Provision for high/low agreements: (i.e., a voluntarily agreement specifying a minimum and maximum amount of damages, regardless of the ultimate verdict issued returned by the jury).

By CHARLES H. JUNG

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Central District Issues Rare Opinion Rejecting Stipulated Protective Order

In Protective Orders on August 23, 2010 at 6:47 am
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Magistrate Judge Fernando M. Olguin issued a rare opinion about a stipulated protective order, rejecting the proposed  stipulated order in Murphy v. Continental Tire North America, Inc., No. CV 09-3004 GHK (FMOx), 2010 WL 3260183 (C.D. Cal. Aug. 9, 2010).  The court gave six  reasons for the rejection, including the failure to include a good cause statement (citing Makar-Wellbon v. Sony Elecs., Inc., 187 F.R.D. 576, 577 (E.D. Wis. 1999) (even stipulated protective orders require good cause showing)), lack of specificity in the description of the material to be protected (the parties used conclusory terms such as “confidential technical information”), and duration (“once a case proceeds to trial, all of the information that was designated as confidential and/or kept and maintained pursuant to the terms of a protective order becomes public and will be presumptively available to all members of the public, including the press, unless good cause is shown to the district judge in advance of the trial to proceed otherwise”).   Read the rest of this entry »

Saved Development Costs Available as Measure of Damages

In Remedies on August 22, 2010 at 11:55 am
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Judge Phyllis J. Hamilton of the Northern District of California issued an order this week on motions for partial summary judgment in Oracle Corp. v. SAP AG, et al., No. C 07-1658 PJH, 2010 WL 3258603 (N.D. Cal. Aug. 17, 2010) (slip op.).   In considering whether recovery of “saved development costs” is an available measure of damages, the court  distinguished Ajaxo, Inc. v. E*Trade Group, Inc., 135 Cal. App. 4th 21 (2005);

Read the rest of this entry »

Judge William Alsup Warns Litigants in Golf Club Case: “No mulligans on summary judgment or discovery will be permitted. Both sides must be ready to come out swinging.”

In Fun with Trade Secrets on August 21, 2010 at 11:57 am
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In Swingless Golf Club Corp. v. Taylor, No. C 08-05574 WHA, — F. Supp. 2d —-, 2010 WL 3081255 (N.D. Cal. Aug. 6, 2010), plaintiff claims patent infringement, misappropriation of trade secrets, unfair competition under Section 17200 of the California Business and Professions Code, violation of the Lanham Act, 15 U.S.C. 1125(a), and breach of contract related to the “swingless” golf club.  At the heart of the dispute is a golf club that is a:

pyrotechnic device that uses explosive charges, a wedge-shaped piston, and a trigger to blast golf balls hundreds of yards down a fairway. Designed for golfers who cannot (or would rather not) swing, this intriguing invention– which looks like a traditional golf club except that it is loaded with gunpowder . . . . Read the rest of this entry »

Blog Notice: In Trial, So Will Post Shorter Updates This Week

In Blog Status on August 21, 2010 at 10:12 am
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I’m in trial the week of August 22, 2010.  I’ll continue updating the latest case law developments and jury verdicts, but the summaries will be more abbreviated.

Best,

Charles

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